Zaka'h on Shares and Investments I have some shares that have diminished in value since I purchased them. Will I calculate zakat on the original purchase price or at the current value or at the market value at the day zakat is being calculated or at the average market price during the year (average price is difficult to arrive at, I take the highest price and lowest price during the year and divide it by 2). I do not want to sell these as I will have to book a substantial loss. Moreover, I have some loan on me. What will be it's treatment? Reply Before I give you a specific answer to your question, I would like to stress that my point of view regarding this specific issue is integrated with the fact that in my opinion, an Islamic state does not have a right to impose any other tax besides zaka't on its Muslim citizens. If you do agree with me on this basic premise, the answer to your question shall be different, while if you don't, it shall be different. In my opinion, the investments in shares makes you an owner of a company. If the company is producing goods or services, it shall be charged zaka't according to the principle described in one of my other answers to a similar question . While if the company is a trading concern, it shall be charged 2.5 percent on its closing inventory (as on the zaka't deduction date). If the company is paying its zaka't, no zaka't shall be levied on its owners or shareholders. But in case the company is not paying its zaka't, a particular owner may pay the zaka't on his share of the total production. This may be understood by the following examples: 1- In case of a Production Company (Using both Labor and Capital in its Production) Suppose a person holds two percent of the total shares of the company. Suppose the total cost of goods produced by the company is Rs. one million. This means that the total zaka't levied on the company comes to (5% of 1,000,000) Rs. 50,000. The share of zaka't of the particular individual holding two percent of the shares comes to (2% of 50,000) Rs. 1,000. 2- In case of Trading Company Suppose a person holds two percent of the total shares of the company. Suppose the total value of the closing inventory on the zaka't deduction date is Rs. one million. This means that the total zaka't levied on the company comes to (2.5% of 1,000,000) Rs. 25,000. The share of zaka't of the particular individual holding two percent of the shares comes to (2% of 25,000) Rs. 625. Now, if you do agree with our point of view that the state does not have any right to impose any other taxes on its Muslim citizens, besides zaka't, you may adjust your zaka't payable against the taxes paid by the company. But in case, you do not agree with this premise, then you shall have to calculate zaka't on the lines described above. Any loans may be adjusted against the total wealth on which zaka't is to be calculated. I hope this helps. Regards The Learner